Dive into Note Investing Without Spending a Dime
Want to break into note investing without a single dollar of your own? Back in ’96, I started with zero cash by referring notes to professional funders, and you can too—it’s the easiest way to begin. In this week’s video, I share three simple steps to launch note investing in 2025 using other people’s money. This is education, not advice; results vary, so touch base with local rules. Ready to start? Let’s go!
What Are Seller-Financed Notes?
Note investing means buying loans at a discount for income or profit. My focus is performing seller-financed notes—loans where a seller, like a homeowner, finances a buyer’s property purchase, often in “for sale by owner” deals. These privately-held notes are beginner-friendly, unlike complex bank notes. With 2025’s 5–6% Fed rates boosting seller financing, these notes are popping up everywhere. By referring notes to professional funders—experienced investors or institutional buyers—you learn fast, earn potential fees, and keep things simple. Funders handle the details, making it low-stress. I started this way in ’96, paying off credit card debt with my first fee—results vary; it takes effort, but it’s doable.
Step 1: Find Notes with Direct-Mail Lists
Start by sourcing seller-financed notes using note holder lists from trusted providers like this one. For a reasonably low investment, you can get 1,000 names with loan details. In ’96, I found a $50,000 note this way. Send direct-mail letters: “Want to sell your note? I’ll connect you with a buyer.” Direct mail beats online platforms, which often have vague details. My 2024 campaign landed a $40,000 note—results vary. Mail 100 letters to kick off, and refer notes to funders who streamline the process. Skip bank notes—they’re too tricky for beginners. Touch base with local rules, and you’re set.
Step 2: Tap Financial Pros for Referrals
Build a network with attorneys, accountants, and financial planners who know note holders. Advertise in “Accounting Today” or join chambers of commerce. In ’97, I got a $60,000 note referral from a Chicago accountant. Say, “I connect note holders with funders—let’s work together.” Refer leads to funders who handle due diligence and compliance, teaching you while you earn fees (amounts vary). Local networking trumps online forums for trust. Check local rules to stay smooth, and funders make it easy.
Step 3: Buy Your First Note
After 3–5 referrals, buy a $5,000 performing note. Check liens via the county recorder; bid 40–50%. In ’98, I flipped a $5,000 note for $12,000—results vary. Funders guide your buy, keeping it simple. Use direct-mail leads, not platforms. Avoid bank notes. Touch base with a lawyer if needed.
Watch the Video
See how I started with a $50,000 note in ’96.
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